RBC Capital's Thompson on RBA Policy

The video discusses market expectations for rate hikes, focusing on the potential for 25 or 50 basis point increases. It examines the RBI's policy decisions, market reactions, and the impact of inflation. The discussion also covers risk and reward in the current market, the role of economists, and the bond market's influence on future rate expectations.

What are the current market expectations for interest rate hikes?

• 125 basis points in total

• 50 basis points per meeting

• No hikes expected

• Decrease in rates

What is the RBI's base case for the upcoming rate hike?

• 25 basis points

• No change

• Decrease by 25 basis points

• 50 basis points

What has been a criticism of the RBI's policy decisions?

• Too conservative

• Policy missteps and wrong footing market expectations

• Lack of communication

• Too aggressive

How does the bond market react to a 50 basis point rate hike?

• Large bullish reaction

• No reaction

• Small bullish reaction

• Bigger bearish reaction

What is the potential impact of a 25 basis point rate hike on the bond market?

• Large bearish reaction

• Small bullish reaction

• Small bearish reaction

• No reaction

What is the current outlook for future rate hikes according to the transcript?

• Rate hikes will continue indefinitely

• Rate hikes will end soon

• Rate hikes will increase

• Rate hikes will decrease

What has been the recent trend in the three-year yield?

• Dropping significantly

• Increasing steadily

• Remaining stable

• Fluctuating wildly